Money and ElectionsMoney and ElectionsObjective 26HObjective 26H

Campaign SpendingCampaign Spending• Total spending for all party efforts

in the 2004 presidential election reached over $2 billion.

• Sums from the 2006 congressional election were well over $1 billion.

• Parties and candidates draw money from both private contributors and the public treasury.

Private SourcesPrivate Sources1. Small contributors: donations of

$5 or $10 (make 10% of funds).2. Candidates: use their own money

and funds from those in appointive offices.

3. Political Action Committees (PACs): political arms of interest groups and organizations.

4. Temporary Organizations: units holding fund-raisers or other events .

Public Funds and Why People GivePublic Funds and Why People Give• Public funds are subsidies (grants

of money from a gov’t) from the federal and some state gov’ts. Most come from the federal treasury.

• Most campaign contributors give to get something in return such as appointive office. Most organizations have particular policy aims.

Regulating Campaign FinanceRegulating Campaign Finance• 1907 : federal law makes it illegal for any

corporation or bank to finance any election.• 1971: Federal Election Campaign Act

(FECA) replaces earlier laws loosely drawn and largely ignored.

• 1974 & 1976: FECA Amendments are the legislative response to the scandal of the Nixon years.

• 2002: Bipartisan Campaign Reform Act (BCRA) attempts to close soft-money loop-hole in the Amendments.

Federal Election CommissionFederal Election Commission• FEC, est. in 1974, is an independent

executive agency administering all federal campaign finance law. It is made of six (6) members.

• These laws are strongly worded but poorly enforced due to FEC underfunding and understaffing.

• FEC requires disclosure of campaign finance data, limits campaign contributions and expenditures, and provides public funds for election campaigns.

Disclosure RequirementsDisclosure Requirements• First required in 1910 and intended to

spotlight money placement in federal campaigns.

• Cash gifts of more than $100 are prohibited as are foreign funds. Contributions/Expenditures of more than $200 must be identified by source and date; contributions of more than $5,000 must be reported within 48 hours as must funds more than $1,000 received within the final 20 days of a campaign.

• All contributions and expenditures must be made through a single campaign committee.

Limits on ContributionsLimits on Contributions• Contribution regulation began in 1907

with corporations and banks and first included labor unions in 1943. Individuals have been subject since 1939.

• The total of any person’s contributions to federal candidates is now limited to $101,400 per election cycle.

• Strict enforcement did not occur until FECA and Amendments.

PAC ContributionsPAC Contributions• To get around bans on contributions,

business entities form Political Action Committees which seek to shape public policy in their favor by participating in campaigns for elective office.

• PACs for special interest groups are known as “segregated fund committees” and raise funds only from members, not the public.

• Some PACs are “unconnected committees,” independent entities which can raise funds from the general public.

• PAC contributions are limited to $5,000 per candidate, $15,000 per party per election.

Limits on ExpendituresLimits on Expenditures• Federal law first limited expenditures in

1925, however, most limits only apply to presidential elections due to Buckley v. Valeo in which the Court held that such restrictions violated the 1st Amendment’s freedom of expression.

• The Court did hold that the expenditures of presidential contenders who accept FEC subsidies can be regulated, but candidates do not have to accept these funds.

Public Funding of Presidential Public Funding of Presidential CampaignsCampaigns

• FECA est. Presidential Election Campaign Fund and every person who files an income tax return can assign $3 to this fund.

• Monies in the fund are used in:• Preconvention campaigns: contenders must raise

$100,000 in public funds to be eligible.• 2. National Conventions: applying parties are

automatically eligible.3. Presidential election campaigns: major party candidates automatically apply, minor candidates must cover certain percent in popular election.

Hard Money, Soft MoneyHard Money, Soft Money• FECA only limited “hard money” (money raised

and spent for election campaigns) until 2002.• In 2002, the BCRA began to limit “soft money”

(funds given to party organizations for other purposes but end up financing campaigns).

• Since then, independent political groups with no ties to any party have formed in the BCRA’s loophole to pour money into campaigns. Examples include: America Coming Together, MoveOn.org and the Media Fund.